Election 2017 and Housing – What the Manifestos Have Overlooked

How do we fix the UK’s broken housing market? Property expert Russell Quirk from online estate agents eMoov analyses the political party manifestos for the upcoming general election and offers up his seven step plan.

Best Intentions

Housing is always a hot topic and a key facet to any political parties’ armoury of empty promises when approaching an election, as we are right now.

Each party will and has laid out, perhaps with the best intentions, a plan to turn around a nationwide housing crisis that has been long in the making. But the recurring theme across all parties seems to be that they have given up, there is no solution, and that at least by addressing it within a paragraph or two of their manifesto with some rehashed rhetoric, they are ticking a box that needs to be ticked.

Inadequate Supply

But they haven’t conceded recently that for decades there has been an inadequate level of supply; just 140,000 homes built with a need for 240,000. The increasing demand from a swelling population has not chosen to subside and this imbalance of supply and demand has resulted in house prices soaring to previously unimaginable levels.

This isn’t a problem refined to home buyers in the private sector. The rental market which was traditionally the stepping stone to homeownership is also now in short supply and unobtainable for many.

Add to that the fact we aren’t building any more council houses – the waiting list for these is also bursting at the seams – and you have a situation already at crisis point.

Election Manifestos

So what have the political parties pledged? Thankfully, all are agreed that more houses need to be built. Despite their recent outlandish claims in their housing White Paper, the Conservatives have failed to mention anything property-related worth noting. Both the Lib Dems and Labour believe that penalising developers guilty of land banking is the way forward, which it isn’t.

In a nutshell, Labour seems the most genuine in their support of actually building. The Lib Dem’s are hanging their hat on rectifying the rental market. The Conservatives are going for the throat of house builders whilst supporting estate agents.

What the Manifestos Should Have Included …

I’ve highlighted seven simple steps to address the UK housing crisis, that have all been overlooked by the current politicians in power.

  1. Appoint the Secretary of State for Housing and Planning to Cabinet

Removed by the Conservative /Lib Dem coalition of 2010, how can housing be treated as the priority unless the person leading it is sufficiently senior enough to push its agenda?

  1. Public land

National and local Government own thousands of hectares of land currently sat unused. This land could / should be utilised for housing development on a large scale.

  1. Green belt

The green belt was incepted to protect from urban sprawl. But its existence has not been reviewed for 60 years. There are parts of the green belt that are not very green such as scrap yards, industrial estates and so on. Just 9% of the UK is currently built on and releasing 1% of the current green belt would yield enough land for 800,000 homes.

  1. Developer land bank incentives and penalties

The larger house builders ‘land bank’ as much as 10,000 plots of land at any one time.

The suggested penalty system to force the build-out of this land-bank alone would be too punitive and heavy-handed and would only lead to even fewer properties being built.

The solution is, therefore, tax breaks on the development of land across certain time scales. For example, anything owned for less than five years would pay a lower rate of corporation tax than that over five years.

  1. Any term ASTs

Assured Short hold Tenancy (AST) agreements are used by up to one million renters each year. But one year is not enough time for a family to make a rental property a home and these out of data tenancy agreements need to be updated so that landlord and tenant alike can agree their own, long-term time frame tenancy to provide both security to the tenant and income to the landlord.

  1. Social Housing Investment scheme

For a while now the supply of social rental and affordable purchase/part purchase has largely been achieved through linking to S106 agreements. So, when developers decide to slow down, social housing flow suffers.

A Social Housing Investment Scheme will allow investment into the construction of social housing schemes in return for the monies that they invest being deemed tax free with the option to sell the scheme after five years. As a result, the private sector would actively boost the supply of social housing.

  1. GB Developments Limited

We propose a radical change to development that is predicated around a publicly owned property developer being established that actively seeks out private and publicly owned sites that it then achieves planning consent for and develops itself.

The country can no longer rely on the private sector alone to provide our growing population with accommodation and therefore a competing entity in the form of GB Developments Limited will take them on, head to toe and to beat them to the punch on acquiring land and building on it. Profits will be reinvested in further schemes and will be owned by the tax-payer.

Kindly shared by HomeOwnersAlliance